Stage Two's blog

While this blog typically focuses on the marketing of consumer technology, I couldn’t pass up the chance to review what I found one of the most viral and successful marketing campaigns of the year. It applies, in general, to what we do here at Stage Two, as it deals digital downloading, and the concepts set forth could most certainly be adopted by consumer electronic companies.

Unless you were living under a rock for the better part of this year, you would have most certainly heard about British rock band Radiohead’s announcement that they would offer their new album, “In Rainbows” to fans via a ground shattering new business model: Pay What You Want. Fans could download the album for whatever price they deemed worthy, even if that price were FREE.

Radiohead (and their management, more so) harnessed the power of a perfect storm. Consumers have long been suffering the fallout of a death match between an ailing RIAA and the 800 lb. guerilla that is the internet, and their announcement couldn’t have come at a better time. The story was immediately picked up by everyone, from the smallest music/tech blogs to the largest traditional print/television press across the globe, much of it virally. Music fans cheered, the RIAA heralded it as a death knell, and Radiohead basked in the notoriety.

In the weeks after the announcement, however, it turned out that the campaign was, in fact, a giant PR/Marketing stunt. Consumers wondered why the album had been offered in such a low quality bitrate (160 kbps, to be exact). As it turned out, this was due to the fact that Radiohead had been planning on releasing the album in a traditional CD format, (as an $81 super premium box set, no less) all along. Due to the huge buzz created by the campaign, they in fact found themselves in an old fashioned bidding war over the album with major distributors. It was a high-class problem to have and the digital downloads peaked at 1.2 million in October, with the average price paid at approximately $6/download. Although the situation may have left a bad taste in the mouths of some fans, it did little to damage the huge amount of positive coverage they received.

So what is the take away from all of this? Firstly, allowing consumers to decide what they would pay for a product or service takes the power away from the corporation and puts it squarely in their own hands. This is called individuation of consumption (read The Support Economy, by Shoshana Zuboff and James Maxmin, for more on the concept), and addressing it can have giant benefits in relation to customer acquisition and loyalty. It’s a highly innovative concept, and we’re guaranteed to see more companies embracing it in coming years.

Secondly, and perhaps most importantly, regardless of how exquisitely planned your marketing strategies are, there is always a bit of the ol’ “being in the right place at the right time”. This is not to be confused with luck, and does not mean one cannot plan for it. A company (in this case, Radiohead) can assess the consumer’s pain point (paid vs. free downloads), and wait for the correct “pain apex” (mounting anger towards the RIAA) to offer a solution (Pay What You Want). Regardless of the true intentions of the “In Rainbows” campaign, it set forth a completely new idea for artists (and companies) to address and engage consumers, and I applaud them for their revolutionary and brilliant marketing tactics.